South African exchanges back legal decision to treat crypto as a financial asset

  • Major South African cryptocurrency exchanges like Luno and VALR are poised to adopt new crypto regulations.
  • Some of the major crypto exchanges in South Africa have already followed KYC rules along with necessary anti-money laundering (AML) and counter-terrorism financing (CTF) measures.

Crypto exchanges in South Africa have expanded their support for regulatory measures to treat cryptocurrencies as financial assets. Regulatory rules in the crypto space will come into effect within the next 18 months. Crypto exchanges suggested this as a positive development that boosted crypto adoption in the country.

Earlier this week, the South African Reserve Bank (SARB) announced it would bring regulatory rules to the crypto industry by early 2023. South Africa’s central bank expressed its willingness to treat cryptocurrencies as financial assets, not currency. South African Reserve Bank deputy governor Kuben Chetty said:

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By all definitions it is: [cryptocurrencies]not currency, it is an asset. It is something that is exchanged, it is something that is created. Some have support, some don’t. Some may have real underlying economic activity.

The adoption of cryptos in South Africa has grown at a significant pace. Over 6 million South Africans are currently invested in the crypto space. The recent SARB ruling will bring more clarity to the regulations for crypto companies operating in South Africa. This will further help them to work in a safe environment that ensures customer safety.

Here’s what the best crypto exchanges in SA have to say:

Crypto publication CoinTelegraph spoke to some of the major exchanges operating in South Africa. Marius Reitz, director of Luno, South Africa’s leading crypto exchange, said he welcomes developments in crypto regulation. Reitz added that this will create a more secure environment for crypto users in the country. It is added:

It will require Crypto-Asset Service Providers (CASPs) to obtain FSP licenses and it will be easier for the public to identify a trusted and licensed platform. This will create a barrier to entry for these platforms without regard for the security of funds and customer information.

Outside of South Africa, Luno operates in several global markets, such as Malaysia and Singapore. Reitz said Luno had already worked to anticipate regulatory changes in South Africa. In addition, he said meeting the new regulatory parameters would not require them to make major changes to their processes. Crypto exchange Luno is already conducting KYC checks. In addition, he has also taken the necessary AML and CTF measures.

Another South African cryptocurrency exchange VALR is a very popular and trusted platform for crypto trading. Like Luno, VALR also has KYC checks and AML and CTF statistics. In addition, it also has its own risk management and compliance program. CEO Farzam Ehsani told CoinTelegraph that crypto regulation will not create barriers to the exchange. He stated that the entire crypto industry would fall under the Financial Intelligence Center, further adding:

VALR is already registered with the Financial Intelligence Center and we have been working with the FIC for many years, so any formal regulatory framework for this requirement will only formalize what VALR already has.

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